TMI Blog2024 (3) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... post-dated 09.10.2006 and cleared on 11.10.2006, the payment can be treated to have been received on 29.09.2006. In any case, we also agree with Ld. DR that if the stand taken by assessee/Ld. AR is accepted, it would give an unfettered leeway to persons to by-pass the requirement of 2nd proviso to section 50C(1) by applying a trick where a person can receive a post-dated cheque of any period and thereby mis-use the benefit of 1st proviso. We do understand that such a situation ought to be stopped. Therefore, we are not convinced by arguments of Ld. AR in this respect. In conclusion, we are not satisfied that the assessee has received any part of consideration through cheque on or before 29.09.2006 (date of agreement) and therefore we hold that the AO was right in not giving benefit of 1st proviso to section 50C(1) to assessee. The first grievance projected by assessee is therefore rejected. Benefit of exemption u/s 54B - whether the investment made by assessee after execution of sale-agreement but before registration of sale-deed, from the moneys received under sale-agreement, is eligible for exemption or not? - On a careful consideration, we find that the issue is settled in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: Full value of consideration 48,05,000 Less: Indexed cost of acquisition 1,91,773 Long-term capital gain 46,13,227 Aggrieved, the assessee went in first-appeal but did succeed. Now, the assessee has come in next appeal before us on grounds mentioned earlier. Ground No. 1 to 3: 3. In these grounds, the assessee has challenged the capital gain assessed by AO at Rs. 46,13,227/-. Ld. AR for assessee made certain specific pleadings qua these grounds and we confine our adjudication to the pleadings made before us and argued by both sides. Ld. AR pointed out that the assessee has two-fold grievances, namely (i) the lower-authorities are wrong in not allowing the benefit of 1st proviso to section 50C(1), and (ii) the lower-authorities are wrong in not giving benefit of exemption u/s 54B to assessee. Benefit of 1st Proviso to section 50C(1): 4. Before proceeding further, we make it clear that the 1st proviso to section 50C(1) was although enacted through Finance Act, 2016 w.e.f. 01.04.2017 but both sides agree that as per judicial rulings, it was retrospective in operation and applicable to AY 2011-12 under consideration before us. Hence, there is no dispute between parties on this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayments noted on Page 2 of sale-agreement entered by assessee clearly reveals that the assessee received a sum of Rs. 6,00,000/- in cash, Rs. 10,00,000/- through cheque dated 09.10.2006, Rs. 5,00,000/- through cheque dated 24.06.2007 and Rs. 14,00,000/- subsequently. Thus, Ld. DR contended, the assessee has received only a sum of Rs. 6,00,000/- in cash before 29.09.2006 (date of agreement) and other payments through cheques are received from 09.10.2006 onwards. Therefore, the assessee has not received any part of the consideration through a/c payee cheque on or before 29.09.2006 (date of agreement), therefore the requirement of 2nd proviso is not satisfied and the assessee does not deserve benefit of 1st proviso as being claimed by Ld. AR. 7. In rejoinder, Ld. AR once again carried us to the very same Page No. 2 of the sale-agreement as referred by Ld. DR and submitted that the sale-agreement clearly mentions that the cheque dated 09.10.2006 was a postdated cheque. He contended that the assessee received cheque on 29.09.2006 (date of agreement) although it was post-dated 09.10.2006. He contended that the requirement of 2nd proviso is only to receive part of the consideration throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hable. In assessee s case, as accepted by Ld. AR for assessee, the cheque itself was post-dated 09.10.2006 whereas the sale-agreement was made on 29.09.2006. Further, the bank a/c of assessee shows that the cheque was cleared on 11.10.2006. Thus, in the situation, although the cheque was cleared on 11.10.2006, it could be treated as having been received on 09.10.2006. But it cannot be accepted as having been received on 29.09.2006. Had the assessee received on 29.09.2006, a present-dated cheque and not post-dated cheque and the same would be have been cleared in bank in 2-3 normal working days, there might have been strength in the argument that it should be treated as having been received on 29.09.2006 but this is not so in present case. Ld. AR has not quoted any decision holding that in a case where cheque itself is post-dated 09.10.2006 and cleared on 11.10.2006, the payment can be treated to have been received on 29.09.2006. In any case, we also agree with Ld. DR that if the stand taken by assessee/Ld. AR is accepted, it would give an unfettered leeway to persons to by-pass the requirement of 2nd proviso to section 50C(1) by applying a trick where a person can receive a post-da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d purchased in the name of son is eligible for exemption u/s 54B. Ld. AR submitted that the decision is binding upon ITAT, Indore and involve identical facts as in present case, therefore it has to be applied. Ld. AR, however, went on submitting that there are other decisions also as mentioned at (b) to (e) in above list where the same proposition has been held. Ld. AR also submitted that even if there is any decision holding against assessee in the knowledge of department, the view favourable to assessee has to be taken as per landmark judgement of CIT Vs. Vegetable Products 88 ITR 192 (SC) . 11.1 Ld. DR for revenue submitted that every person is independent in the eyes of law as well as Income-tax Act, 1961 and even wife or son of an individual is also independent. He submitted that the assessee has purchased new land in the name of son and not in his own name, therefore clearly not entitled for exemption. To support his contention, Ld. DR relied upon a decision in Bahadur Singh Vs. CIT(A) (2023) 154 Taxmann.com 456 (P H) in which the Hon ble Punjab and Haryana High Court has rejected assessee claim of exemption u/s 54B on the basis of purchase of land in the name of wife. Ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessee has received sale-consideration from buyer, there was no purpose of holding such moneys till registration of sale-deed or investing such moneys for some strange purpose. The assessee has made a better compliance of law by making immediate investment in new land, (iv) the purpose of section 54B is to remain invested in agricultural land and the assessee has achieved such purpose fully, and (v) That the section 54B is an incentive provision and it must be interpreted beneficially and liberally. Then, Ld. AR also relied upon following decisions wherein the assessee made investment of advance/earnest-money/ consideration/sale-proceed received under sale-agreement and the Courts have allowed exemption u/s 54B even though the investment was made before registration of sale-deed: (a) Dharmendra J. Patel Vs. DCIT (2023) 152 Taxmann.com 465 (ITAT, Ahmedabad) (b) Ramesh Narhari Jakhadi Vs. ITO (1992) 41 ITD 368 (ITAT, Pune) (c) Smt. Narayan F. Patel Vs. PCIT (2023) 152 Taxmann.com 53 (ITAT, Surat) It followed the decision of Hon ble Bombay High Court in Mrs. Parveen P Bharucha Vs. Union of India WP No. 10437 of 2011 dated 27.06.2012 (Para No. 12 of order). 12.1 Per contra, Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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